When you try to stay up to date in healthcare innovation, you have probably already heard of Amazon Care (https://amazon.care). This new services is a new hassle-free way to see a caring, licensed doctor or nurse. You can chat or video with the practitioner or make an appointment in the app or schedule an in-person visit at home. What’s new? There is probably very little news value in the US in this message except that the company is a big-tech company. It is not a surprise that Amazon is the big-tech company that entered the providers market. Traditional retailers as Walmart have already started to offer healthcare services to their customers. Walmart calls the service Walmart Health.
This new development is a significant change in how the sector has operated in the last centuries. Then, healthcare providers were people or organisations whose core business was providing care services. Even with the large healthcare organisations in the United States, the core business remains healthcare-oriented. Additional services might come from other industries. With the offerings from Amazon Care and Walmart Health, we see that players from other sectors become healthcare providers for the first time.
Amazon Care: a trend?
When we look at the product offerings of both Walmart health and Amazon Care, they are distinctly different from classical healthcare product offerings. For example, both services try to respond to feedback from patients. In addition, convenience, time and transparent pricing are often not unique selling points of healthcare providers. But patients do value these USP’s.
The parallels between the evolution of retail and the development of healthcare are very similar. For example, at the beginning of this century, a mismatch of supply and demand caused, among others, a crisis in the US automotive market for brands like GM. GM and Chrysler experienced tough times as their models did not align with the demands from consumers for smaller cars. Likewise, in healthcare, many providers continue to look at the market as supply-driven. In contrast, retailers start to approach the market from a demand-driven approach. So far, the later strategy turned out to be more successful. So Amazon Care and Walmart Health are taking a head start.
Who’s leading the healthcare change?
Healthcare is one of the last consumer industries that could keep business model innovation out. But, as we have seen with other industries, trying to hold on to business models is not a very good strategy. In addition, the healthcare industry is changing on multiple levels, making an already complex sector even more complicated, at least for a while.
The different levels are the payment structure needs to change from a fee for service model to a pay for performance model or a capitation model depending on the type of health service. The second challenge is to evolve from a single discipline approach to a multidisciplinary process. The third change in the healthcare industry is from supply-driven services to demand-driven services.
This transformation is much more complex than transformations in other sectors. This is because the change in the payment model, the organisational structure and the service delivery is highly challenging for complex systems. This complexity is, for me, the reason why organisations like retailers are faster at changing service models than healthcare providers. The result of this situation will be that healthcare providers are losing control of the transformation process.